Dear Bill, your case for shorting DECK is proven wrong, at this moment! Try to come to my perspective and see the big picture. I will part with this baby at $60, when everyone starts to sing praise of her.

People, in the short term, rationally or irrationally, have collectively voted with their money, that they believe, taken all factors into account, this company deserves a P/E of 14. There are people who think it deserves more, so they buy; and there are people who think it deserves less, so they sell.

You are making an unwarranted assumption when you said that this is no longer a growth company. No one has a crystall ball that reads the future. It did not grow much last year, but that does not mean it has no potential to grow. What is overvalued or undervalued is not as simple as a cut-and-dry mathmatical equation.

I think people were overly optimstic when the shares were traded above $100, because they relied too much on the future unrealistic growth rate. I think people were overly pessemestic when the shares were traded around $30, because they gave too little credit to the strength and potential of the brand and the balance sheet and too much weight to a probably short term revenue and earning set-back.

I think if DECK has a few good quarters in 2013, its shares will hit $60 and that is when I will sell my shares. I think that is how to make money, buy low (when people are fearful), sell high (when people are greedy). Sounds familiar?

Oh, I always know how to find a value stock underpriced. Whenever I move away from my own time-tested strategy, my "core competence" as Buffett put it, I lose money. My shortcoming is that I always sell too soon. I had invested in the early days of ANF, AEO, FOSL, etc. but parted with them after a short term turnaround. Had I kept those shares, boy, I might have quit the rat race in Corporate America already.

This gentleman seems to know all the details of DECK better than I know about the women in my own hands, but he never seems to "get" it when it comes to the overall big picture.

When he supposedly made any money on shorting DECK on pops and drops, it was due to his thorough fundamental analysis (he always jumps out with "I told you so" after every pop and drop). However when the longs have their recent gains, Bill attributes this to their sheer "luck."

Bill, do not take this personally, just honest personal observation :-). I feel that Bill is the role model of Wall Street analysts, hehe.

Dear Upbeat, no one has the crystall ball, whether it is for the stock price of DECK or the future of UGG boots. Yes, the street is littered with once-trendy-but-now-gone fashion items. The goal of a successful investor is to find the one, or the ones, that have got a competitive edge, that has got a decent shot to outlast the crowd. The street is littered with failed beverages, but Coca-cola endures. If in its suppsedly fading days, UGG boots is still no 1 or no 2 key phrase search terms in the Interent during holiday seasons, you have to ask yourself this questioin, is the brand so irrevelant that its stock is traded at multiple lower than that of S&P average?

" Nobody was buying this stock at 30 because its a growth story over 2011. They were buying it because the growth collapse was more than priced in....just as many were shorting under the assumption that the growth story was overpriced....its a pendelum."

Man, you nailed it! It is what Graham calls the mood swing of Mr. Market!

"a lot of the glamour has come out of the product?" Maybe. Maybe not, but one thing is certain, much much more, proportionally, has come out of the stock price, probably unjustifiably so. shares were (at low $30) traded so low that it could not go much lower barring unusual development. So there is sufficient "margin of safety." And even the shorts recognize that point, which is why they bought so many shares after the recent earning release. Otherwise, Bill is partly right, as the earning release in and of itself, does not justify the close to 20% price run up.

I am not buying now. I bought my 2014 calls and my shares from $31 -$42 and will buy more in dips.

I do not look at the short term, or quarterly numbers, but if they are bad, that creates good buying opportunities for me so long as (1) the company will not go under, (B) the company has a steady (better if it grows) long term prospect, and (C) unique competitive advantage.

I disagree that the revenue is dying. With their retail roll out, and recurring purchases from people who need replace their old UGG boots, the business is solid and may increase. And for $31-$42 a share, I can buy an earning per share of $3.45, I am good.

When everybody else gets excited about UGG (trust me, that day will come) and give it a P/E of 20, I will part with my shares.

It is like I am not buying LULU today (because people love the shares so much that they are blind to see any downside risks), but if it drops below $20 (for short term reasons), and LULU has no liquidity/bankruptcy risks, I will buy. Of course, I will not short LULU.

Bill, no one has the crystall ball to get that $5 and $10 profits from shorting. With all due respect, it is with the benefits of hind sight that you saw all the shorting opportunities, the pullbacks, etc. Looking forward, on balance, the company's business prospect is stable and improving.

The argument for shorting may be a good one, and it has been, when the shares were traded on unrealistically optimstic assumptions about future growth. However, Bill, if you decide to short this company now, I honestly think that you are taking an unwarranted amount of risk for a less than 50/50 chance of profit.

Nothing personal, but if you wake up one day and this thing is traded at $60 (due to a tender offer or something good news), you will appreciate my point. However, if this thing goes below $40 again, I will buy more and sleep very well during the night. Why, because (A) this company will not go under (no substantial debts, forget about your microscope analysis), and (B) this company will not go away. Why? Just ask 100 women in your life (Do you have so many?), if they can afford, will they buy UGG boots, tell me how many of them answer in positive and how many in negative. Repeat this exercise 3 years from now. What else do you need to know?

Forget about everything you said except this one: "for the full year, Deckers reported earnings per share of $3.45." Give it an S&P 500 average P/E for outstanding company with an excellent brand, you tell me how much each share is worthy?

"The stock trades at a similar valuation to December of 2011. At that point, there was a lot more potential growth, and earnings were expected to be almost $7.00 in 2013. Now those expectations are for $3.66, yet you're paying the same P/E multiple for the name."

Bill, it is time to buy (not to short) a solid company when everyone else is pessemestic about its future and gives it a lower earning estimate and valuation, so long as the company will not go under or go away. Warren Buffett put it very concisely, "whether it's socks or stocks, I love to buy at discount," or words of similar effect. Let's add UGG boots or DECK shares here. There are many factors beyond the control of this company, but one thing works for them: (enough) people love UGG boots. For me, UGG boot is like Coca Cola for a segment of the world population: upper middle-class (or aspiring upper middle-class) women.

I am amazed by the level of details in your article and the depth of your analysis, but still, as before, I have to tell you it is not worthy the risks for you to pick up a few dollars shorting a decent company. Your gains are limited, for example, if this thing dips to $40, you short it at $50, your gain is $10 per share. But if a buyer emerges, or most likely their business and margin improve, you can witness a short squeeze. I think most shorts are covering nowadays, $50 is within reach soon.

Again, my point is that this whole thing is improving, and weighing the risks and rewards, you do not want to be short.